PSNH request would drop rates

By DAVE SOLOMONNew Hampshire Union LeaderMay 03. 2013 12:40AMMANCHESTER - Public Service of New Hampshire is inching closer to the energy supply rates offered by competitors in a preliminary forecast filed Thursday with state regulators.

If the PSNH rate request is approved by the PUC and goes into effect on July 1 as proposed, the company's energy service rate would be cut from 9.54 cents per kwh to 8.98 cents per kwh.

ENH Power is offering 7.28 cents per kwh and North American Power is offering 7.29 cents, both with a six-month guarantee. PSNH delivers the power and bills the customers, no matter who provides the energy.

In addition to lower rates for energy supply, the company is also seeking a decrease in its stranded costs recovery charges, which are allowed by the PUC to compensate the utility for costs brought about by deregulation of the energy industry in New Hampshire.

The lower energy supply and stranded cost charges would be offset somewhat by an increase in the distribution charge, the third portion of an electric bill designed to pay for the transmission system.

With all charges accounted for, the monthly bill of a PSNH customer using 500 kwh per month would drop $3.42 from $92.43 to $89.01.

PSNH spokesman Martin Murray said there were several factors contributing to the lower energy charge, including lower than expected energy prices on the wholesale market.

"We have been operating since Jan. 1 on the basis of what we expected costs to be moving forward for the full year," he said. "Now we have updated information on what our costs have actually been, and firmer information on what they will be going forward."

Murray said the company was able to take advantage of low natural gas prices as they declined, but when they spiked in January and February, the company was able to use power from its coal-fired plants in New Hampshire for a brief period at prices lower than the wholesale price.

"If those plants had not been operating efficiently during that period and we had been forced to purchase at market prices during that period, our costs would have been higher by more than $45 million," he said. "The vast majority of that savings was during January and February."

The company also cited favorable changes in renewable energy rules and the expiration of expensive contracts with independent power producers as contributing to the lower rate.

The PSNH energy service rate is set by regulators at the company's actual cost of purchasing or producing the energy necessary to meet customer demand. The company makes most of its profit on the distribution charge.